FEMA wants ineligible disaster payments back

The Federal Emergency Management Agency has begun the process of sending out letters to thousands of people in Mississippi who received FEMA financial assistance after Hurricane Katrina that they were not entitled to.

“Even as funds are quickly distributed to meet the needs of disaster victims, FEMA takes very seriously our responsibilities to taxpayer dollars, and is careful to make sure funds are distributed appropriately,” said David Paulison, acting director of FEMA.

While it isn’t known for certain how many letters will be sent out in Mississippi, an estimated 50,000 letters in what FEMA refers to as its recoupment process will go out to residents affected by Hurricanes Katrina and Rita in Alabama, Mississippi, Louisiana and Florida.

FEMA has done a detailed review of applications and awards, and where appropriate, has begun notifying individuals by letter about necessary repayments, payment plan options and the appeals process.

Historically FEMA requests reimbursement of approximately 2% to 3% of the funds, said Eugene Brezany, public affairs officer for FEMA on the Gulf Coast.

“In a disaster setting, this is not unusual,” Brezany said. “People have an opportunity after they have received the letter to get back to us and file an appeal. They need to explain in writing why they feel the FEMA decision is incorrect, and send any new information they might have to show the appeals officer why they were eligible for the money. The letter has to be postmarked 60 days from the date they get the letter.”

Brezany said there are four primary reasons for asking for FEMA money back:

• The individual was covered by insurance.

• More than one person in a household applied for assistance.

• People applied for money on a secondary residence. Only primary residences qualify.

• Fraud by intentional misrepresentation of needs.

“In the midst of tens of thousands of applications every day, undoubtedly there were a percentage who were duplicate members of the same household, or people applying for a second home,” Brezany said. “We are paying out taxpayer’s money, and we have to be good stewards of those taxpayer’s dollars.”

Regarding insurance, in many cases homeowners have insurance covering wind damages, but not flood damages. Are those kinds of homeowners eligible for assistance even though they received some insurance settlements on wind?

“FEMA isn’t looking at the difference between wind and flooding when accessing damages,” Brezany said. “We are accessing damages. If the damages are such that you can’t live in your home, and you have no insurance that is covering that area, possibly the government is in a position to be able to help. Regardless of the type of insurance coverage, if you are underinsured the government may be able to help. But we don’t restore people to their pre-disaster condition. We are a bridge to recovery. Our attempt is to get people back into safe, secure, sanitary living conditions.”

There is one more reason for people getting the letter, and that is errors made by FEMA processors. Large numbers of people were hired after Katrina to process disaster assistance, and few had experience with the process. Many were working long shifts seven days a week to help the government respond quickly.

Some advocates for Katrina survivors believe that in the case of FEMA errors, it isn’t appropriate for FEMA to require repayment.

“We would never defend fraud,” said Sonya Murphy, head organizer for Mississippi ACORN (Association of Community Organizations for Reform Now). “On the other hand, the instructions from FEMA were terribly confusing to a lot of people. Our issue is with the letters being sent out to individuals who probably weren’t eligible. FEMA made errors in their processing, so we don’t think the people need to be held accountable for FEMA errors. FEMA needs to look at how they process applications.”

Murphy has been hearing a lot of concerns from members of its Katrina Survivors Association. Most lost their homes and everything in it. Some have relocated elsewhere at least temporarily, and might be separated from family, friends, churches and schools — and their job.

“They have been through a lot, and this is the last straw,” Murphy said. “This is what ACORN has found talking to lot people. FEMA sent out inspectors to people’s homes, the inspectors tallied up the information, and people thought they were eligible being FEMA sent inspectors out and then a check came in the mail. According to their understanding, they went through all the eligibility requirements and were found eligible, so they got a check. During the first three weeks, FEMA didn’t send inspectors, but sent money. There was a lot of confusion in what FEMA was doing.”

The problem is exacerbated by the fact that a lot of the Katrina refugees in the Jackson area have been unable to find employment. Murphy said one problem is public transit. The buses don’t run after 6 p.m., so anyone who gets off work later than 6 p.m. can be stranded. Lack of employment could make it impossible to repay FEMA.

“I don’t think it is fair to many of the Katrina survivors to come up with this money,” Murphy said. “There are a lot of obstacles facing Katrina survivors. The jobless rate was high before Katrina. Imagine how much more scarce jobs are here afterwards. It is unfair for people to say, ‘It has been six months. That is long enough.’ For people who lost their jobs and everything they had, six months is not a lot of time to get back on their feet.”

ACORN will provide assistance for Katrina survivors who want to appeal the FEMA determination that they were not entitled to assistance. For more information, call (601) 360-5123.

Detailed instructions about appealing the determination will be provided to individuals in their initial letter outlining the recoupment and appeals process, as well as information on setting up repayment plans.
In the future, FEMA hopes there will be fewer cases of payments being made to people who are not eligible.

“Technology continues to offer new opportunities to improve, and FEMA has now added another layer of identity confirmation at the point of telephone or online registration,” Brezany said. “This technology is in place as the 2006 hurricane season approaches.”

The FEMA auditing process will continue for several months using both automated and manual forms of review. FEMA has provided financial disaster assistance to nearly 1.7 million households following hurricanes Katrina, Rita and Wilma.

… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.

If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.